Question

When looking for accounting or documentary symptoms of fraud when a merger occurs, one of the first steps should be to:

a. Make sure that the purchasing company got a fair deal.
b. Make sure that the selling company properly disclosed its financial troubles.
c. Make sure that both the buyer and the seller were content with the deal.
d. Make sure that the accounting methods used were appropriate and consistent with accounting standards.

Answer 1

the correct answer is d. Make sure that the accounting methods used were appropriate and consistent with accounting standards.

Step-by-step explanation:

When looking for accounting or documentary symptoms of fraud when a merger occurs, one of the first steps should be to:

1. Make sure that the accounting methods used were appropriate and consistent with accounting standards.

Accounting methods play a crucial role in determining the financial health of a company. By ensuring that the accounting methods used during the merger were appropriate and consistent with accounting standards, it helps to prevent any potential fraudulent activities or misrepresentation of financial data.